'In Turkey, our motto is: The refrigerated market leader, a rising value among curtainsiders'

Cold chain logistics is a highly important transportation method for Turkey. Turkey's climate conditions, production and its export of most of its fresh fruits and vegetables render this transportation method very crucial. And the most important elements of this transportation method are the refrigerated vehicles that transport the cargo.

There are a few major brands that operate in the Turkish market with refrigerated vehicles. Equipped with brand new technologies, brand serve the transportation sector with their vehicles while fulfilling an important duty. In addition to the domestic brands, there are also global brands in the market that have proven their quality across the world.

One such brand is Schmitz Cargobull. Actually, we can say that Schmitz Cargobull has almost become a Turkified because it has inaugurated a production facility here where each day it increases its production capacity.

From what we've heard, this facility in Turkey will be producing different vehicles in the future.

In this file, we've listened to Schmitz Cargobull Sales Director Nihat Ö. Ayhan about the sector and their own brand. What is the state of the refrigerated vehicle market? Turkey is going through a rough phase... How much did the increased currency affect this German-made product's market performance? Do you have a future action plan to support the market?

Here are some of the highlights from the interview;

"Both our customers and we have the desire and obligation to serve. We all have a passion for our jobs."

First of all, I would like to say one thing: There is not a single market or sector that hasn't been affected by the current phase. We're all experiencing our share of it. However, I think that this is just temporary. All the parameters will definitely fall into their places. Economic indicators will draw closer to their average levels, everyone will take up their calculators and commerce will continue where it left off. However, the critical issue is how the consumers and manufacturers can manage this temporary situation. Honestly, we're all having a hard time. 

These days, every sector has the pressure for service. Most of the customers we serve our international transporters and they are serving their own customers without hesitation. So, both our customers and we have the desire and obligation to serve. We all have a passion for our jobs. In order for both sides to continue trading, they have to create better conditions for each other. Before answering your question of what Schmitz Cargobull is doing in these conditions, we should go back two years and remember some of the developments.

"We began investments in July 2016 and began production in Adapazarı in April 2017. First, we began manufacturing curtainsider trailers, then we continued with refrigerated vehicles and we're doing pretty good."

In 2016, Schmitz Cargobull has officially took over the organization in Turkey and began operating its sales activities as its 100 percent owner. The company did it right after the July 15 coup attempt. Schmitz Cargobull has proved that it trusts in the Turkish transportation sector and industry by taking its decision to invest in Turkey, right after the coup attempt. Two years have gone by. We began production last year in April. First, we began manufacturing curtainsider trailers, then we continued with refrigerated vehicles and we're doing pretty good.

Today, Schmitz Cargobull takes a second step in a shrinking, stressed and tired market to increase its investments through its own financial solutions. Therefore, Schmitz Cargobull once again shows its trust in the Turkish market through such an investment.

"We use our own resources to provide financial solutions for the needs of our customers with term options that range from 6 months to 36 months."

Just as in many sectors, Heavy Commercial Vehicle market shines out with its own dynamics. Today, our customers specifically want to receive service from a single location. They need to receive second hand, finance, spare part, maintenance and miscellaneous services from a single point. In Europe, sector's successful players can be successful as long as they can bring all the components of the system together. As a company of 125 years, we directly serve 34 countries and even though we have only passed our 2nd year in Turkey, we've managed to complete our structuring process in such a short time. 

We began our trade and second-hand activities last year and it is currently operating rather pleasantly. However; forward sales, meaning financing, is yet another important issue and despite all these negative market conditions, Schmitz Cargobull trusts in its customers and its sector just as it did in 2016 and now, increases its investments through its own finance solutions without hesitation. We use our own resources to provide financial solutions for the needs of our customers with term options that range from 6 months to 36 months. Of course, in time, exceptional circumstances and demands can be taken into consideration. However, our general plan is to offer a Euro-based financing solution to our customers for 6-36 months.

"Our new campaign "Footsteps of The Blue Elephant" awaits our customers at mavifilinayaksesleri.com until the end of October."

As you know, the market shrank and consequently, our efforts to maintain and increase our marketshares have grown. Today, there are a few things that can convince and encourage our customers to continue their investment decisions. And we should never think of it in terms of price. We always directly or indirectly talk about the prices; however, prices are not the only thing that our customers need. First of all, quality in product selection can turn things in favour of the user in terms both operating costs and second-hand values. Schmitz Cargobull manufactures the most economic products in the segment with their high quality and lasting conditions.

We've set out for a campaign in September with our highest performance products until the end of October 2018. In this campaign, we vocalize the fact that the Blue Elephant stands by its customers at all conditions. Our campaign is called: "Footsteps of The Blue Elephant". Our customers can review our products on our mavifilinayaksesleri.com campaign website, check out our campaign conditions and directly contact our sales team. And I would like to recommend our customers to fill out the contact forms on our campaign website as soon as possible to take advantage of a limited number of trailer promotion packages.

As part of this promotion package, we offer the best "Schmitz" price for the conditions of the day. In addition, our trade support increasingly continues. We gladly renew the vehicles of our customers regardless of the brand and number of vehicles. We began offering financing solutions, which will allow us to meet an important demand. Who provide special discount on the spare parts for the vehicles purchased as part of the campaign. In addition, we offer a 1-year extended warranty free of charge for vehicles purchased as part of the campaign. Therefore, this is a campaign that will benefit our customers in various ways, both today and in the future. Because we have spread the benefit all along the operation process. This is how we're trying to help our sector and our customers. We're doing everything in our power to offer our support.

"... so far, we did not cancel any of our orders."

Just like a truck and tractor truck, trailer is an investment tool. In these investment plans, sometimes we have customers that panic due to the conditions of the day. Especially during the August 10-12 period when the currency hit peak, some of our customers returned to us saying whether they should delay or cancel the orders. This is something that every manufacturer faces; however, thank God, we didn't cancel any of our orders so far. People panic with good reason but people need to begin to see the balance once again. But it will pass. I'm sure it will pass because Turkey has always been a strong and very important market. This market is not just important for the Turkish players but the foreign players as well. I think that the market will reach its balance once some of the current issues are resolved.

They say: "... stay calm. These times will pass and we will get through these times not by taking our foot off the pedal, but by pushing it even further."

Even though we're busy with the domestic market in our daily lives in Turkey, we encounter different dynamics in our travels abroad. For example; Schmitz Cargobull directly operates in 34 countries and makes sales to overseas countries. So, it has a lot of know-how and dynamics. They are receiving information from a vast geography and they have a much calmer view on such developments. They don't make daily assessments like we do.

As a similar example; Schmitz Cargobull is the leader of the Russian market as well. Orders from Russia have exponentially grown in the last couple of years; however, recently there have been similar phases there as well. None of our executives and colleagues in Germany are panicking: they tell us: "Stay calm. These times will pass and we will get through these times not by taking our foot off the pedal, but by pushing it even further." In 2016, we decided to make an investment and come here in a time when foreign guests were cancelling meetings. Now, in a time when everyone is trying to figure out what's going on, we're increasing our investments through our own financing solution to meet our customers' demands.

"The market began 2018 with a 15% increase in the first quarter; however, the 40% market loss that began in the second quarter has currently brought a 25% decrease."  

Schmitz Cargobull has completed 2017 as the market leader of the Turkish refrigerated trailer market with 23,7 percent. It has increased its curtainsider trailer marketshare from 6 percent to 9 percent and for this year, our goal is to increase it all the way up to 15 percent this year.

We can see that the trailer market has decreased by 25 percent by the end of July. There is a 25 percent decrease; however, we began the first quarter of the year with a 15 percent increase. I guess that all the brands have made plans for 2018 with good expectations. The first quarter was very good; however, the election process that began with the second quarter as well as completely different problems we've encountered while waiting for a balance, changed all the plans. It has reversed our gains from the first quarter. We've had a 40 percent loss starting from the second quarter.

Currently, the market has decreased by 25 percent compared to last year. However, we're still maintaining our leadership in the refrigerated trailer market in this shrinking market. We've concluded the year with 23,7 percent and now, we're at 23,2 percent. We estimate and hope that we will reach above the 25 percent level at the end of the year.

For the curtainsider trailer market, we've concluded 2017 at 9 percent. However, now we've reached 11 percent. There is an increase in our marketshare but we are a bit behind our expectations. Despite all the difficult conditions and unforeseen circumstances, we're acting according to our plan.

I think that our "Footsteps of The Blue Elephant" campaign will accelerate our sales. As part of this campaign, we're offering our own financing solutions while trying to provide an extensive range of opportunities to our customers from trade to extended warranty and discounts on spare parts. I'm still hopeful for the rest of the year.

"Schmitz Cargobull continues its market leadership in 4 categories with 25% in the total semi-trailer market that also includes products that the brand doesn't manufacture, 31% in the curtainsider trailer market, 53% in the refrigerated trailer market and 19% in the tipper trailer market."

I wanted to vocalize what Schmitz Cargobull is doing in other countries and how those are reflected here. Aside from a few exceptions, Schmitz Cargobull operates through its 100% very own companies in 34 countries including Turkey. It is serving its customers with its own sales teams. Schmitz Cargobull operates in three main product groups with its three products; curtainsider trailer SCS, refrigerated trailer SKO and the tipper trailer SKI.

With these 3 products, Schmitz Cargobull is the market leader of the total semi-trailer market that also includes products that the brand doesn't manufacture, with 25 percent of the shares. European semi-trailer market's size has grown from 130 thousand in 2012 to 220 thousand today. There is a steady growth in the heavy commercial vehicle market. Just last year, it has grown by 5 percent compared to the previous year.

In short; Schmitz Cargobull continues its market leadership in 4 categories with 25% in the total semi-trailer market that also includes products that the brand doesn't manufacture, 31% in the curtainsider trailer market, 53% in the refrigerated trailer market and 19% in the tipper trailer market.

"In Turkey, our motto is: The refrigerated market leader, a rising value among curtainsiders."

In Turkey, refrigerated vehicle deliveries increase with the harvest of fruits like grapes, figs and cherries. The number of orders for these deliveries may vary for every brand. Our delivery times are between 8-10 weeks from our Turkish factory; however, that period is between 22-24 weeks in our European refrigerated vehicle factory. There is a significant demand for it in Europe. Our refrigerated vehicle assembly line in Turkey, can manufactured about 80 percent of the technical configurations demanded in the market. This means that we can deliver orders from April-May sometime around January-February. Our refrigerated vehicle charts also start to rise in those months.

If we take a look at Turkey's current refrigerated vehicle market, we can say that there is an increase even though it hasn't even come up near its past average levels. The decrease has been a lot tougher this year for curtainsider vehicles and we have actually managed to balance that level of decrease without refrigerated vehicle sales. Compared to last year, the refrigerated vehicle sales are 50 percent higher. There are actually a few reasons behind that. First is the accumulated demand in the market. Second is that refrigerated transportation requires expertise and high quality. Of course, refrigerated transportation's profitability and freight costs are much better; that's why our customers have a much better investment power.

They have definitely been affected by the market conditions; however, I can say that it is much lower compared to other segments. On the other hand, as of January 2019, new laws will come into force in Turkey for cold chain transportation. International transportation companies have already been subject to these norms. That's why they have been investing accordingly for many years but we've also seen an increase. The accumulated demand, new developments on the ATP certification as well as requirements for certain new transportation certifications have also stimulated new vehicle investments. For example, we see that pharmaceutical transportation companies and supplier companies are asking more and more about the Pharma certification. Even companies that are not currently transporting pharmaceuticals opt for purchasing higher-spec vehicles as they see it as an investment tool. Today; double decker, partitioned and side-door vehicles, Pharma-certified vehicles and many others with different features are getting more and more demand in refrigerated transportation. The more features you have, there is a chance that you can increase your profitability even further because it increases your options. In that sense, I can say that refrigerated segment investments are improving and that such developments have been in the lead.

I estimate that the refrigerated market will grow even further next year and that the market will balance itself out. The current phase will end and I don't think that it will take very long. Everything will come to a balance and everyone will re-shuffle their cards.

There is a potential for exports and import; however, the problem is the difficulty of estimating costs. The fluctuations in the currency has messed up all the cost estimates. In fact, this is our main problem in the sector.

Turkey has a level of power that everybody knows around the world and that is something that won't change. We're serving in the transportation sector and this sector serves through imports and exports. These are our life lines. Our market has always been among the top 5 of the European trailer market. From that point of view, we can interpret Turkey's role in exports and imports. Turkish market will always find and maintain its own dynamics. We're just having a tough phase right now.

"The state provides Special Consumption Tax incentive for replacing heavy commercial vehicles but we need different incentives for trailers."

Our state definitely supports the sector but they can take new actions according to the conditions of today. Our sector's stakeholders are vocalizing it everywhere. I agree with all the opinions and especially those of TREDER. The state provides Special Consumption Tax incentive for replacing heavy commercial vehicles but we need different incentives for trailers. We should not forget that our sector is based on imports and exports. This means that we're a part of every equation. That's why our sector must be supported. Our customers have been making sacrifices for many years. Despite all the increased expenses, the freight costs have been very low for many years. This will affect imports and exports. I believe that the state must support our sector and these investments through such perspective. The transportation sector needs that support.